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The Journal Editorial Report

Paul Gigot discusses news, politics, society and finance.

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  FOX News    The Journal Editorial Report    Paul Gigot discusses news,  
   politics, society and finance.  

    March 2, 2014
    12:00 - 12:31pm PST  

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fox news sunday is a presentation of fox news. this week on "the journal editorial report" you questions about just how seriously the justice department is taking the irs targeting preeb, as a new rule restricting political speech, has the agency come under fire from liberals and conservatives? plus, a serious proposal to overhaul the tax code for the first time in twiyears. but is there any hope for congressional action this year. and the pentagon proposes to slash the army to its smallest size in the last 75 years. how risky are the cuts for american security. welcome to "the journal editorial report."
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new questions this week about the investigation into the irs targeting of conservative groups. with the house subcommittee holding hearings, you know just how seriously the department of justice is taking this probe. they're doing this as liberal groups like the aclu and sierra club join conservative clubs voicing opposition into a new irs rule into further restricting political speech. for more on both of these developments i'm joined by "wall street journal" column dannetinger. kim strofle and colin levy. kim, let's start with you there in sin city, washington. you're covering the hearings this week. what have we learned about the state of justice to probe just as it is? >> well, they had a number of legal experts appear before the house oversight committee. it was a pretty depressing recounting, paul.
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what's pointed out here, this seems to be a farce. you got this probe headed up by a former obama donor, barbara bosserman, a trial lawyer heading up out of the civil rights division of the justice department which traditionally been known as sort of a hot bed of liberalism. >> hold it, kim, this is not being run out of the criminal division? >> right. public integrity unit which is where it should be. this is being run out of the civil rights division. >> what is the civil rights response when pointed out? >> you know, they don't have a response. that was actually part of discussion in front of the committees. they won't brief congress on anything. one of the scholars pointed out it's ludicrous. and this witness used to work at the justice department. said that's ludicrous. there's no reason they couldn't be updating congress on the status of this.
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they appear to simply not want to share. or in fact, they're maybe not doing what they're supposed to be doing. >> there's also new evidence this week that the irs is still going after conservative groups when it is vetting tax exempt status. tell us about that kim. >> yeah, so, you know, one of the biggest fictions this year is the idea that somehow the entire irs targeting thing has been solved and fixed. there was a story i had out about this one group, the tea party patriots. it's astounding. they're still being targeted. they had been approached last year by the irs for a special deal. the irs basically said we'll give you your determination as a 501 c board if you give up your speech rights. they turned it down. the result was another round of harassing questions. they continue to have to wait for their letter. here's the end the story, the woman who runs tea party patriots, martin, suddenly appears on the witness list to testify before congress. the day before she was supposed
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to give that testimony, the irs called and said, guess what, you've got your determination letter, footbally. >> dan, where's the rest of the press corps on this? it is like the story doesn't exist? >> other than people like kim and a few others digging into it and coming up with really troubling details. remember, is this not any garden variety of government. this is the irs with the tax power to -- over every american. >> the standard line for why we're not covering it there's no smoking gun connecting the white house. i kind of agree, there is month smoking gun, there's really a smoking fuselage right there. it's about citizened united, the supreme court decision in early 2010 who said corporations and private groups could participate in politics. that's right. right after that in the state of the union speemp, anybody who watched it will never forget the president with the premium court
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justices sitting in front of him denouncing citizens united. after that, it put off a chain of events at which various democratic senators would send letters to the irs. >> and hold hearings. >> and hold hearings. >> saying what are you doing about the tax-exempt groups? >> note able, dick durbin of illinois, chuck schumer, asked the irs to get on the job of investigating these tea party groups see if they were violating irs laws. and lo and behold, that's exactly what they did. that is exactly what the hearings have been all about. what more do you need to do to connect the dots for the fact that something was set in motion to push these people out of politics. >> colin, this is a new developing story in the sense the irs has proposed a new regulation about what the 501 c-4s can and cannot do.
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it's got an uproar? >> and the comment period closed on thursday with over 100,000 individual comments. i mean that just shatters every other -- it was already breaking records when it was at 20,000. so this is an astonishing development. coming from the left and right. the aclu saying it was politically child. and you hear them saying this has significantly harmed our democracy. and the tea party groups, jennie beth martin testified in the oversight committee this week. and they said, basically, this rule would force her group not to even mention a name of a candidate within a certain period, 30 to 60 days before an election. they'd have to scrub their website. >> collin, is there anybody for this other than politicses who don't like people running against them? >> i guess the irs. >> right. all right. >> and i think -- let's
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understand what's going on here. between now and november, those liberal groups will remain in action. this is being done to intimidate all these conservative groups from staying on the sidelines in the midterm election. i think it's going to have its intended effect whether it becomes official or not. >> thank you all very much. when we come back, for the first time in 25 years, a meaningful tax reform proposal was on the table in congress. even some republicans are saying well maybe not now. are they right? ♪
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the debate about meeting the tax is over. we've already lost a decade, brand we lose a generation, we must enact real, meaningful tax reform to get this economy back on track. republican house ways and means chairman dave camp this week unveiling an ambitious plan to overhaul the nation's tax
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code. for the first time since 1986. at the heart of camp's proposal is a move to collapse the current seven income tax brackets into just three. with 99% of taxpayers paying 10% orp 25%. his plan would also eliminate some popular deductions. a political risk in a midterm election year. we're back with dan hettinger and kim straussle and mary o'grady joins us now. mary, you've looked at the details, what do you like in the plan? >> well, paul, i'll start with simplification, lower marginal rates and fewer carveouts for people who can afford to put lobbyists in washington 24/7. right now, the u.s. tax code is 70,000 pages long. in 1986, it was 26 pages long. so if that doesn't signal that something is wrong, i don't think we have any evidence. on top of that, the irs, according to dave camp, the irs
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erroneously sent $132 billion to taxpayer money to false, fraudulent claimants over the last ten years. and on top of that, you know, a tax code should encourage innovation. and investment. and discipline. >> danelle, that last point is where i pick up. i think the focus here on this reform is simplification, as mary suggests. but it's also growth. we need a tax code that doesn't retard the economy but enhanced it. and more incentive to do so in places that really increase productivity. i think this goes a big step in that direction. not perfect, but a big step in that direction? >> for sure. i've taken a look at some provisions and let me say it's not going to put tax accountants out of business. >> no, that's a dream. >> it's simple. but it's not simple.
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another one of this thing does is reduce the corporate rate to 25%. >> which is 35%. closer to 40 if you include state rates. >> yeah. if you talk to people in business, they would say, wow, that would enlock a lot of money if you would get that rate down to 25%. the interesting thing is, obama could have had that 25% rate in his first terp. there's generalized bipartisan support for doing it. he won't do it, which is one of the big problems sitting in the middle of tax reform right now. we don't have the presidents willing to participate in the process. >> you know, kim, dave camp came in to see us this week. he didn't say that, i'm going to infer that a lot of weaknesses, the top 35% of individuals still who high for reform. but those attempts really to reach out in a bipartisan fashion for democrats and republicans who run the senate and white house and say maybe we can get something down this
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year. is that prospect at all possible? >> well, the history you point out is important, too. remember, mr. camp has been working on this for three years. 30 hearings. he was also working closely with max baucus who was the chairman of the senate finance committee. >> and they shipped him to beijing as the new ambassador. what does that tell you about the tax reform? >> and that, you just put your finger on it. so there have been a few outl r outliers in the democratic party. and possibly, the successful by ron white. for the most part, this party remains as dan said, as does the president, for tax reform, they don't want scandal, they like the productivity of the current code. and they're willing to accept all of the messiness that comes with it if they can generally keep that in place. >> what about the risks politically, for example, the deduction in the mortgage
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interest deduction you can take. right now, it's capped at $1 million. the cap would reduce that to 500,000. on future mortgages which is still a pretty big house by most american standards. >> not surprisingly, a lot was for the real estate and home building industry. working to denounce the bill. i think one thing that's going to help dave camp is that the government has finally agreed to look at this new package using what they call dynamic scoring. which is they will measure not just how many cuts there are. but if the economy gross ws as expect, what the revenue will look like. and what dave camp outlines for us a very positive story in tellers of more revenue for the government. >> $700 billion estimated over ten years which is a huge revenue windfall. >> why say, dan, the republicans should vote on this, even though
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the leadership is saying privately they don't want to. republicans have got to be for something for a change. we know they're against deficits. this or that program. we know they're against obamacare. great. what are they for? >> right. as you pointed out in the beginning, congressman camp held hearings all over the country. he's listen eed to a lot of people. much of what came out of those hearings which is to say, i believe there is broad political support in the country going in that direction. republicans should take advantage of that. >> thank you all. when we come back, the pentagon proposing to slash the army to pre-world war ii levels. what it means for the interests abroad next. this program is brought to you by blue emu. it would fast. with my friends, we'll do almost anything.
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week proposed slashing the army to its smallest sizes in 74 years. setting up what promises to be a fierce fight on capitol hill with lawmakers on both sides of the aisle vowing to fight the proposed cuts to the pentagon budget. "wall street journal" foreign affairs column wrist brett stevens joins us with more p. so, brett, they're taking the army down from what to what? >> 4520,000 now. under 450,000 at some point in this term. which would leave us with an army as small as it's been since 1940. on the eve of the second world war. on the other hands are he's increasing special forces from 66,000 to 70. and taking down the marines slightly from 190 to 182,000, for status quo, mostly. >> what do you make of this and is it as risky as some of the critics say? >> i think it is. for instance, with an army of
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450,000 men, if we had that in 2007, we never could have contemplated the surge. >> the surge in iraq. >> the surge in iraq which at least aloud to us win the war in iraq. let's not forget the army was already too small. under the first bush administration, that's why we had to fight the afghan and iraq wars essentially sequencially. that left us weaker. the administration says this is an army size for the kind of strategy we have. but in geopolitics, you don't get the fight. you only fight the wars that you -- >> wait a minute, they're saying, we're investing in cyber. cyber is a big threat. everybody agrees. and seeming to invest in the navy. the marines and special forces are expeditionary forces.
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they can get to places fast. you don't have to have the logistics to bring them over in the tens to hundreds of thousands. what's wrong with that strategy? >> let me take you back 14 years. defense secretary donald rumsfeld said we're going to have a revolution in the future we're not going to be fighting lower-tech fights. we need a high-tech force. and that's what happened when a bunch of guys with box cutters went on planes. we don't know, the responsibility of the superpower can be prepared for a variety of contention. >> is the american public prepared to finance what brett is talking about?
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>> what happened in europe, the german army is 32,000 or something like that. they simply don't have the defense spending such as the french and british. >> american public will support these kinds of commitments only if the american president uses the leadership to explain to them why it's necessary. and let's sort of understand the context. you mentioned the pivot to asia. made a special trip to asia to reassure that it was real. they doubted our commitment to syria. in all of the areas of the world that senses the united states is pulling back. and if we cut through defense forces like this, they're going to start making deals with whoever they need to in those parts of the world, and that will be to that detriment for sure. >> you know, brett, in the past,
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when bill clinton cut the gdp, the republicans fought back and tried stop that. and they did, they put a floor under it. and we had to buildup post 9/11. what happened, where are the republicans standing up and making critique of this? >> yeah, there's very little opposition. and the opposition you hear to base closings is the wrong type of opposition. we need to focus on overhead. there's an isolationist move that's taken over the republican party. i know they hate that word. but that's essentially what it is. the idea that we have to pare back for the sake of government. the prosperity at home also depend on the secure and prosperous world. >> we hope there will be a real debate going forward. we have to take one more break. when we come back hits and
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time now for hits and misses of the week. nasa this week announced that it had discovered 715 new planets throughout the universe. this -- let's remember that 20 years ago, we didn't know there was a single 34r57bet outside of our solar system. this is the kind of basic research that nasa does so well. and i think it's so important, a legitimate function for governors. i congratulate all the sciences at the space agency for doing this essential fundamental work. >> collin. >> this is a hit to a cyber group called empower texans which is standing up to lone star states. even though that information isn't required under state or federal law.
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in 2011, two legislators criticized by the group ran for the state ethics commission and got it to subpoena the group. now the group has filed a federal lawsuit saying that violates the first amend free speech, good for them. >> dan? >> this this week's universities. a gallup poll found 11% of business leaders think the schools are giving them adequate skills they need for the modern workplace. just before that, another gallup poll found 96% of chief academic officers believe by and large they're doing a good job. this is a big disconnects. >> essentially when you need jobs. >> yeah, it seems like a wake-up call for colleges and universities. >> remember if you have your own hit or miss. send it to us at je jer @foxnews.com. thanks to the panel and all of
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you for watching, i'm paul gigot. hope to see you right here next week. ukraine is mobilizing its army as the white house warns russia there will be repercussion. welcome to america's news headquarters. i'm greg jarrett. uche yan is now calling a military reservist. they are on the brink of quote/unquote disaster. meanwhile, hundreds of russian soldiers form an ukrainian military base in crimea. secretary of state john kerry flat out calling it an invasion. >> russia chose a brazen action and moved in on its forces with a completely trumped up set of

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